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Employment Poised to Turn Positive

Employment Poised to Turn Positive

Despite doom and gloom in Republican talking circles, the overall jobs data is right on track in reflecting a rebound in economic activity.  Just released unemployment numbers show the lowest number of monthly job losses in two years, down to 11,000

When Republicans handed over the Presidency to Barack Obama in January 2009, the monthly losses were 741,000.  If the automobile companies had folded, as they would have in the Spring without government support, another  million-plus people would have been thrown out of work, sending the monthly number over 1,000,000 for several months in a row.

It would have been preferable if private business activity had caused employment to improve.  But the financial freeze robbed businesses of their confidence and their financial capital, so businesses have shedded jobs, delayed plans, and closed down. 

The government rescue gave money to states to stop layoffs at schools and police departments.  In other ways, from the Fed’s low interest rates to funds for infrastructure, education grants, promoting green technology and the like, the government injected money into the economy.  Job losses in September of this year were down to 139,000 and in October, 111,000.  The stimulus is working, despite Representative Boehner’s (R-Oh) claims of failure. 

Jobs are a lagging indicator, which means that new business planning, funding and activity happens first, and then the hiring of employees occurs many months later after confidence improves, and opportunities require new staffing.  The growth rate for the economy as a whole was around three percent for the quarter ending in September, in line with the positive growth rates that the U.S. hopes to sustain for long-range growth, although more is desired now to make up for negative growth during the recession.

The goal is for employment to come roaring back and for private business to take over for public support of the economy. However, businesses large and small are still shell-shocked by the financial freeze and destruction of wealth that it wrought.  They must also adjust to lower spending as consumers behave more responsibly and unemployment remains significantly elevated. Fortunately, there is still a lot of stimulus money left to power infrastructure projects before the handoff to the private sector takes place.

The government has done the lion’s share.  It still needs to implement sound financial reform legislation, giving the public and financial industries confidence in a sound and fair system.  In addition, health care reform in the public and private sectors could free up wasted money for productivity in other areas that serve American business, such as exports.

Insurance regulation and universal coverage, already contained in proposed legislation, will spread the burden of costs more equally.  However, systemic overspending in health care robs families of wages and businesses of profits that could be put to better use.  Following evidence-based medicine rather than custom and practice and market-driven medicine could go a long way to giving us more for our money.  Malpractice reform, consistent with evidence-based medicine, would also eliminate waste.

Look for December or January employment numbers to finally turn positive and fourth quarter growth to remain healthy.  This will be welcome news to the unemployed and businesses, and should give the country more confidence that we are, in fact, on the road to recovery.

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December 5, 2009 UPDATE:  The following graph is current: Click here

December 8, 2009 UPDATEBloomberg Economics podcast of Dec. 7, 2009.  Tom Keen’s interview with Steven Wieting, Managing Director of Economics and Market Analysis reflects on the jobs data and recovery.   It’s technical, but provides some thoughtful observations.

December 21, 2009 UPDATE:  More evidence of recovery in the labor market

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9:59AM PDT on May 4, 2011

I have been actively seeking employment in many fields (not just my operative) for over 3 years here in Maine. Had to move in with my Son and his family because I have no job and no money. I have been trying to figure out a way to kill myself and make it look accidental so my Son will get the 25K Life insurance policy that doesn't expire until March of 2012. He'll need it to pay off my credit card debt incurred from being unemployed and cremate my useless body.

5:42PM PST on Jan 9, 2010

Ding Ding Crash 2. AT&T is eliminating a bunch also. A couple 1000 off the payroll by March and a bigger sweep planned for June. Looks promising.

11:58AM PST on Jan 9, 2010

Time to update the chart. Job loss in December 85,000. Welcome to the new economics....

11:35AM PST on Jan 9, 2010

The only thing it helped is to put all of us further into debt.

9:19AM PST on Dec 14, 2009

Currently, I am waiting to see the next extension of benefits enacted. I will state now, that those who received benefits this year, will not receive them in the next round. Even though nothing has changed. The fact is that they have to drop the unemployment numbers. If they do not, then at least part of this depression will be hung on the current administration as well effect the next elections. One way to do this is to just deny the claims. Even if they loose a few through appeals, over all, they still achieved what they wanted, which is lower numbers. Ultimately, this should set off another round of foreclosures, but I think they plan on off setting that with more bank subsidies. It looks like a shell game. can you find the ball?

11:07PM PST on Dec 10, 2009

You are, and I am so happy for you. I can completely relate. I signed up with Myra's business today and I'm already making money and protecting my legal rights!

If anyone is interested, please note that Myra's profile is not functioning properly. You can get info at: Just follow all the red buttons and watch all the videos. There is a confidential sign up on the site.

10:18PM PST on Dec 10, 2009

I to am lucky not to have to worry about a job, but I have seen the worry on my children's faces when husbands are being laid off and no jobs out there, so I feel like I am truly blessed.

12:00AM PST on Dec 8, 2009

I am so lucky not to have to worry much about the unemployment system. Although my husband has been unemployed for the last 7 months, my business (he likes labor intensive instead of working from home) which I only work a few hours a week is making up the rest of the lost income. We have been able to pay all the essentials, and since we get paid a residual income, we will have money coming to us even when we are not actively working it. You are welcome to contact me at my profile if you would like more information on how all this works. It is legit, and has been on the NYSE for 30+ years, so it is government regulated To Happy Holidays!

11:19PM PST on Dec 7, 2009

I am so hopeful..I have been searching for a few months now.
Good news!

1:11PM PST on Dec 7, 2009

Terry, We agree to disagree. It's about CONTROL of the oil RESERVES. Not a few million barrels.

According to the US Energy Information Administration (EIA), "Iraq holds more than 112 billion barrels of oil - the world's second largest proven reserves. Iraq also contains 110 trillion cubic feet of natural gas, and is a focal point for regional and international security issues."

Sorry Marc S.......... This is not the format/thread to discuss this, Terry. I can send you information if you wish.

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